United Kingdom Automotive Update: Government Announces Delay in ZEV Mandate
On September 20, 2023, the UK Government announced an easing of the Zero-Emission Vehicle (ZEV) Mandate from 2030 to 2035 which Became Law Under the Vehicle Emissions Trading Schemes Order.
On January 3, 2024, the UK mandated that by 2030, 80% of new cars and 70% of new vans sold in Great Britain will be zero emission, increasing to 100% for both by 2035.
The mandate previously stated that by 2030 the UK would end the sale of new gas and diesel cars and vans, but that was extended to 2035 when 100 percent of all vehicles sold must be electric. By 2035, vehicles will also have to qualify as fully zero emission, which is measured at the tailpipe and therefore can only be met with electric vehicles (EVs). The revision states that by 2035 all vehicles sold must be 100 percent electric. For 2024, 22% of all new UK car sales from each qualifying brand must be zero emission, with the percentage gradually rising each year. Additionally, OEMs will be subject to a £15,000 penalty per non-compliant car. If an OEM does not meet the target percentage for that year, there are options to mitigate the fines including buying ‘credits’ from other OEMs who have a surplus.
PM Sunak announced the UK would:
• Delay the UK’s ban on new petrol and diesel vehicles from 2030 to 2035.
• Delay the ban on installing new oil and gas boilers to 2035 instead of phasing them out from 2026 and allow exemptions to the ban.
• Scrap plans that would force landlords and homeowners to upgrade the energy efficiency of their properties.
• Scrap potential plans such as the Great British Insulation Scheme, which sought to insulate 300,000 homes per year over the next three years.
• Invest in infrastructure and R&D.
Despite the delay, car manufacturers still need to meet their zero-emission targets by decreasing the number of gas and diesel cars every year and scaling up the percentage of electric vehicles to 100 percent in 2035. The mandate applies to England, Wales and Scotland from January 2024, stating that EVs will need to account for 22 percent of the manufacturer’s overall vehicle sales, and 10 percent for electric vans, reaching 80 percent by 2030 and 100 percent by 2035.
As the UK is moving towards a net-zero economy, the extension to ZEV mandate presents an opportunity for U.S. companies with expertise in clean technology and EV battery components and supply chains. U.S. companies have a worldwide reputation for innovative products, after sales service, and training which makes them competitive in the UK’s evolving zero-emission vehicle market. The U.S. and the UK also share similar business culture and business practices, which makes the UK an attractive market for U.S. suppliers.
The government also introduced incentive programs for buying electric vans and for purchasing a home chargepoint for those living in apartments.
For more information on the ZEV mandate, please see here.
For more information on compliance, please see here.
For more information contact Jill.Kruse@trade.gov.